PIA Guides Pensions and Insurance Industry during Covid-19

By Doreen Kambanganji-Silungwe

It has become apparent that, as Covid-19 pandemic escalates, it will have a crippling effect on both social and economic aspects of life.  This, therefore, presents a challenge to the pensions and insurance industry. The pensions and insurance industry caters for pensioners who rely on a regular flow of pensions and annuities for their livelihood. Insurers, on the other hand, are expected to settle claims that may arise during this period.

Further, the pandemic may have an impact on the local and global investment environment and pose a risk to the investment performance of the pensions and insurance industry.

At this moment of crisis, the Pensions and Insurance Authority (PIA) is determined that the pensions and insurance industry remain resilient and committed to delivering the promised benefit of a secured retirement income to pension scheme members and settlement of insurance claims. To this end, the Authority, working with industry, has put in place the following measures:

Monitoring of investments

The Authority has requested all pension schemes to put in place measures to ensure that there is no disruption in the oversight function of Boards of Trustees, especially as it relates to monitoring investments. Investment risk management especially for unregulated instruments such as unlisted equity, shall intensify during this period to ensure that funds are not exposed.

Annual General Meetings

Given that it may not be possible to hold Annual General Meetings (AGMs) for some schemes, the Authority has authorised Boards of Trustees to preside over the following matters which ordinarily are presented at AGMs:

  1. approval of audited financial statements;
  2. approval of annual bonus; and
  3. appointment or renewal of appointment of the scheme external auditor.

Further, in order to ensure accountability, the Authority has guided Trustees to seek express approval from the Registrar on any other matter addressed by AGMs that may require urgent attention.

Payment of Pension Benefits

Payment of pension benefit claims by schemes shall continue. In the event that the country moves to a state of lockdown, measures are expected to be put in place to ensure that there is no disruption in payment of monthly pensions to pensioners. To this effect, the Authority has introduced a hotline to receive complaints relating to delayed payment of pensions to pensioners and other pensions related matters.

Protection of Insurance Policy Holders

With regards to insurance, policy holders may be wondering whether insurance companies will be able to cover events and losses related to Covid-19. The answer largely depends on the type of policy that individuals and businesses have. In most cases, pandemics are listed under exclusions unless the policy holder decides to pay an extra premium for such cover. The Authority is therefore calling on individuals and businesses to recheck their policies as well as consult with their insurer.

Some of the claims that may be admissible include cancellation of travel due to falling ill (including Covid-19), life policies (even those deaths occasioned by Covid-19) event cancellation as most of such policies extend cover to epidemics and pandemics. That said, all insurance policies and contracts remain valid subject to terms and conditions. It is therefore important that policyholders also do their part by paying premiums as they fall due to avoid terminations.

Insurers are also urged to uphold Treating Customers Fairly (TCF) principles during this period and conduct business in accordance with sound business principles by maintaining a balance between maintaining financial soundness and honoring their obligations arising from insurance contracts. This will foster consumer confidence in the insurance industry. Aggrieved policyholders can file a complaint with the Authority through the hotline listed below.

Physical Access to the Authority During Covid -19 Pandemic

In light of the guidance by Cabinet Office and in compliance with directives from the Ministry of Health and the National Public Health Institute on preventive measures such as social distancing, the Authority has activated its Business Continuity Plan. This has been done to protect staff and stakeholders.

As of Monday 30th March, 2020 the Authority began to limit physical contact with stakeholders and our staff are now only attending to walk in clients who have secured an appointment. This measure has been taken in an effort to mitigate the transmission of COVID-19.

However, all stakeholders including regulated entities, pension scheme members, insurance policy holders can still reach the Authority using the contact details below.

In conclusion, the Authority, working with industry, will ensure that there is minimal disruption to pensioners and policy holders. Further, the Authority is mindful that Covid-19 will have direct impact on insurance business and to this end, has engaged insurers in order to determine the full impact. Readers will be kept abreast with the findings.

Till next week, stay safe and do your part to minimize the spread of Covid-19.

For comments, questions or clarifications, send us an email at pia@102.23.123.62 or follow us on our facebook page, Pensions and Insurance Authority. You can also call us on 211 251 401/5 or 0977 335809 or 0965 255136.

For Complaints, kindly use the following details:

Pensions related complaints:

 Mobile: 0950 136662, Email: pensions@102.23.123.62

Insurance related complaints:

Mobile: 0950 136663, Email: insurance@102.23.123.62

The Author is the Communications Manager at the Pensions and Insurance Authority.